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Crude Oil February 08, 2019 01:30:06 AM

Nigeria: Petroleum Industry Outlook Post 2019 Elections

OilMonster Author
As it has been for more than a decade, the Petroleum Industry Bill remains the biggest regulatory issue in Nigeria’s petroleum sector.
Nigeria: Petroleum Industry Outlook Post 2019 Elections

SEATTLE (Oil Monster): In few days’ time, Nigerians will go to poll to elect the next president of the country. The main contenders remain the incumbent, Muhammadu Buhari, and Abubakar Atiku, a former vice president.

Despite the talk about diversification, it is highly unlikely that the country’s petroleum sector loses its relevance as the main driver of the country’s economy. In this essay, I attempt an analysis of the key issues affecting this critical industry and how the two leading candidates are likely to respond to them.

As it has been for more than a decade, the Petroleum Industry Bill remains the biggest regulatory issue in Nigeria’s petroleum sector. There was a significant progress in the bill in the last three years, and the progress was championed by the 8th National Assembly (2015-2019). The Bukola Saraki-led legislative arm of government broke the omnibus PIB into four different bills – the Petroleum Industry Governance Bill (PIGB), Petroleum Industry Fiscal Bill (PIFB), Petroleum Industry Administration Bill (PIAB), and the Petroleum Host and Impacted Communities Bill (PHICB). 

The PIGB, which sets out the institutional and regulatory structure of the industry as well as commercial participation by government, was sent to the President for assent in June 2018, but the President withheld his assent on certain grounds, chief among which was the proposal in the Bill to have the Petroleum Regulatory Commission (PRC), the successor agency to the Department of Petroleum Resources (DPR) as the principal regulator of the oil and gas industry, retain 10 percent of the revenue generated by the commission for its own operations. While there is a school of thought that believes that there is more to the presidential rejection than meets the eye, it is difficult to fault the reason stated by the President.

The other three bills have not been sent to the President for assent, just as there has not been any public information on whether the National Assembly will revise the PIGB in light of the president’s concerns.

If Bukola Saraki, who is currently the Director General of the opposition campaign, returns as Senate President post-May 2019, it is highly likely that the PIBs’ traction continues. This will however depend on which President he is working with. It looks like the National Assembly is willing to incorporate the comments made by the President on PIGB. It is therefore highly likely that despite their political differences, a combination of Bukola Saraki-led Senate and Buhari presidency may still deliver the PIBs by the end of 2020 latest.

Courtesy: www.dailytrust.com

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